Good Evening,
Firstly, my background. I'm a downwardly mobile manager in a software company. I've just moved to a 3 day week in an attempt to adjust my work/fun balance, so I have some time to explore other possibilities.
I'm not looking at this as a major revenue earner, but if goes well who knows.
I'm in the process of opening an account with finspreads, I like their small stakes, and I'm just playing with £200 initially (last of the big spenders :cheesy
.
From my initial research, I have come to following conclusions:
a) I'll always have a stop loss in position to cover any negative movements. I'd like this to be a trailing stop loss, probably will require my intervention throughout the trade to adjust the stop loss. (not too controversial)
b) It's safer to short a stock, as the market is more likely to dramatically dump a stock, than shoot it through the roof. Following on from that, investor psychology leads me to believe that if a stock does rocket, that investors are more likely to take a profit, whereas in a crash a lot will sit tight in a paralysis. (Maybe this only applies to private investors rather than institutions, and as such doesn't hold true as the private investors are small beer compared to the institutions?). That said, with my stop loss in place I should automatically remove this concern.
c) For initial stock selection, screen on volativity, then analyse the charts and look for strong trending behaviour, either positive or negative. I'd rule out any stocks below a certain volume (not sure what that value is, but I want reasonable volume levels?)
This may sound really dumb and obvious, but isn't day trading or any TA trading technique, just the ability to spot a trend and ride the trend, leaving as it turns or runs out of steam? I know there are lots of TA indicators (I have read Murphy's TA of the Financial Markets), but even using the basics of trend lines, support & resistance, and a stop loss strategy how can you go wrong.
Presumably, and this may be a moot point (as I recall that TheBlindSquirrel used to use just support/resistance and trend lines to analyse stocks; then again I don't know how successful he has been), by blending more indicators into the mix you might be more successful at picking a winner and timing the entry & exit more effectively. From my previous experiences with TA, I have found that sometimes, you can trawl through the different indicators on a stock, to find some clue that the stock is a winner. It's almost like I want that stock to be the one, so I'll keep trying different TA techniques until I can find one that appears to suggest that the stock is a winner.
This is undoubtedly inexperience on my part and I suppose this is why the testing of a strategy is so vital.
So to my questions.....
1) I think I can quite easily stock screen on the web for the most volatile stocks. However, when it comes to charting do you think I need access to a software package or are there good online charting sites? )Perhaps finspreads has up to the minute charts that come with the account?)
2) There seems to be conflicting views with respect to profits.
<ul><li>Some say "Leave your profits run" (with a trailing stop loss, I can't see a problem with this)</li>
<li>Others say "Don't get greedy, 10 point gain is good"</li>
<li>Others appear to take a half way house, and sell half, and let the rest run</li></ul>
I'd be interested to hear your comments
3) I'm interested in a trading book that deals with alternative strategies. I was going to go for "Trading for a Living" , does anybody have any better alternatives?
Thanks very much for your attention, and I gratefully receive any information/comments that you can provide.
Ciao 4 Now
LoneWolf
Firstly, my background. I'm a downwardly mobile manager in a software company. I've just moved to a 3 day week in an attempt to adjust my work/fun balance, so I have some time to explore other possibilities.
I'm not looking at this as a major revenue earner, but if goes well who knows.
I'm in the process of opening an account with finspreads, I like their small stakes, and I'm just playing with £200 initially (last of the big spenders :cheesy
.From my initial research, I have come to following conclusions:
a) I'll always have a stop loss in position to cover any negative movements. I'd like this to be a trailing stop loss, probably will require my intervention throughout the trade to adjust the stop loss. (not too controversial)
b) It's safer to short a stock, as the market is more likely to dramatically dump a stock, than shoot it through the roof. Following on from that, investor psychology leads me to believe that if a stock does rocket, that investors are more likely to take a profit, whereas in a crash a lot will sit tight in a paralysis. (Maybe this only applies to private investors rather than institutions, and as such doesn't hold true as the private investors are small beer compared to the institutions?). That said, with my stop loss in place I should automatically remove this concern.
c) For initial stock selection, screen on volativity, then analyse the charts and look for strong trending behaviour, either positive or negative. I'd rule out any stocks below a certain volume (not sure what that value is, but I want reasonable volume levels?)
This may sound really dumb and obvious, but isn't day trading or any TA trading technique, just the ability to spot a trend and ride the trend, leaving as it turns or runs out of steam? I know there are lots of TA indicators (I have read Murphy's TA of the Financial Markets), but even using the basics of trend lines, support & resistance, and a stop loss strategy how can you go wrong.
Presumably, and this may be a moot point (as I recall that TheBlindSquirrel used to use just support/resistance and trend lines to analyse stocks; then again I don't know how successful he has been), by blending more indicators into the mix you might be more successful at picking a winner and timing the entry & exit more effectively. From my previous experiences with TA, I have found that sometimes, you can trawl through the different indicators on a stock, to find some clue that the stock is a winner. It's almost like I want that stock to be the one, so I'll keep trying different TA techniques until I can find one that appears to suggest that the stock is a winner.
This is undoubtedly inexperience on my part and I suppose this is why the testing of a strategy is so vital.
So to my questions.....
1) I think I can quite easily stock screen on the web for the most volatile stocks. However, when it comes to charting do you think I need access to a software package or are there good online charting sites? )Perhaps finspreads has up to the minute charts that come with the account?)
2) There seems to be conflicting views with respect to profits.
<ul><li>Some say "Leave your profits run" (with a trailing stop loss, I can't see a problem with this)</li>
<li>Others say "Don't get greedy, 10 point gain is good"</li>
<li>Others appear to take a half way house, and sell half, and let the rest run</li></ul>
I'd be interested to hear your comments
3) I'm interested in a trading book that deals with alternative strategies. I was going to go for "Trading for a Living" , does anybody have any better alternatives?
Thanks very much for your attention, and I gratefully receive any information/comments that you can provide.
Ciao 4 Now
LoneWolf
